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CAP Payments

Most people believe that the Common Agricultural Policy benefits only farmers. So you might be surprised to learn that the largest payments by far in the UK are being made, not to farmers, but to multinational companies.

How does this work? Read this slowly - any company that manufactures or processes meat, bulk fats, sugars, fruit and vegetable for export in a raw or manufactured state may claim refunds on the difference between the EU price they pay and the estimated lower world market price.

Tate and Lyle are the largest declared recipients, obtaining £227 million for the year 2003/4. Other multinational claimants include Heineken, tobacco manufacturers, confectionery producers like Nestle and Mars, and pharmaceuticals like Glaxo, Boots and Rickett. Even Gate Gourmet, the catering suppliers to British Airways, received over half a million pounds for the tiny portions of milk, sugar and butter used on international flights.

Such payments boost the profitability of these companies by reducing some of their raw material costs. All perfectly legal – but does it make sense?


More CAP

EU farmers are constrained by law from using hormone growth stimulants for beef cattle, BST milk stimulant for dairy cows, antibiotic growth promoters for pigs and poultry, or stalls and tethers for farrowing sows, among many other restrictions; and are now required to maintain documented traceability for all crops and livestock.

However, under international trading agreements, the failure to follow any of these production practices is not allowable as a valid reason to bar imports into the EU.

The inevitable consequence is that EU farmers are unable to compete on price with imports from countries that operate without restriction and with cheaper labour. So EU food production continues to fall as home grown food is replaced with cheaper imported products, and farmers continue to be driven out of business and off the land.

The UK government’s official "vision" is:

"a competitive, sustainable farming and food industry which will be internationally competitive; rewarded by the market for safe and good quality food; environmentally sensitive; responsive to the needs of local communities; rewarded by the taxpayer only for public goods that the taxpayer cannot deliver; producing food to high levels of animal health and welfare; not distorting international trade; and operating on a free, fair and level playing field throughout the EU".

In reality, our politicians know full well that the UK will become increasingly reliant upon cheaper imported foodstuffs of unknown provenance, as a direct result of their own policies. But contrast this with the direct financial support given to exporting multinational companies as detailed above, which is specifically designed to level out such price differentials. So, support corporations, undermine farmers; that is their policy of choice – but is it yours?